STRATEGY
SYNDICATION
noted. “Since we were working with the developer, we did not expect to hold onto those properties once construction was complete. However, if you look at what has happened to the values in those units since then, you can see that the people who bought them back in 2012 got a great deal! Today, those units are all worth about $100,000 (or more) than they sold for at that time, and that was with our group still making about 22 percent internal rate of return on their investment in the 2010 syndication.” Today, the Pearl District is still in growth mode. Hyatt Place was planning a new hotel hosting not just guest rooms, but also units for residents. The develop- er predicts 11 stories of guest rooms and public spaces and 12 stories of apartment residences. Portland State University, which is an easy streetcar ride from the neighborhood, also recently announced plans for a new, seven-story college class- room and office facility in the area. •
TAKE A LOOK AT THE EVOLUTION OF A CONTRIBUTOR'S 2010 DEAL. Contributor Catch-Up: Portland’s Pearl District
line (the Portland Streetcar). Today, condominiums and warehouse-to-loft conversions dominate the local real estate along with plenty of mixed-use development and local icons like Powell’s City of Books, Jamison Square, and the Elizabeth Leach Gallery. Travel website howitravel.com named the district one of 2016’s “coolest neighborhoods.” “When we concluded that project in 2012, we had already seen significant value added to our investment,” Fettke
REAL ESTATE SYNDICATION: A transaction between a sponsor and a group of investors. Traditionally, the sponsor is the project manager and brings experience to the deal, while the investors bring the bulk of the funding. This is a way for investors to pool financial and intellectual resources and experience to invest in large properties and projects.
Featured Investor: Kathy Fettke
Kathy Fettke is the co-founder and co-CEO of Real Wealth Network. She may be reached at www.RealWealthNetwork.com.
Fettke’s 2010 syndica- tion deal became today’s Riverscape development, which includes a number of townhomes and condo- minium units, in Portland, Oregon’s Pearl District. At that time, the area was, she wrote, already “trendy.” This made it a great location for invest- ing and provided the investors with numerous, substantiated reasons to expect solid eturns on their relatively low cap- ital investment, which involved purchasing 27 riverfront homes. We wanted to se how the
In this new Think Realty feature, “Contributor Catch-Up,” we’ll explore the evolution of past deals described by our regular contributors and “catch up” with the markets in question in the present day.
I
n the August 2018 issue of Think Realty Magazine , regular con-
tributor Kathy Fettke, co-CEO of Real Wealth Network, wrote an educational piece on the inner workings of “totally passive income from syndications.” In that article (excerpt at right), she detailed one of her first syndication deals, a 2010 project that initiated her into the risks, rewards, and returns possible with real estate syndication. Fettke also evaluated why the project was a success, what she learned, and how investors today could leverage the information in their own deals.
tors departed in 2012.
CONTRIBUTOR CATCH-UP: WHAT DOES THE PEARL DISTRICT LOOK LIKE TODAY? The Pearl District has experienced an ongoing urban renewal since the mid- 1980s, when it was rezoned and became a hotbed of art galleries, boutique businesses, and eclectic residences and eventually received its own near-certain predictor of revitalization: a streetcar
market continued to evolve after the inves-
Powell's Books is the world's largest independent bookstore and is located in Portland's Pearl District.
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